The Magic of Getting a Month Ahead & How to Do It

Master this metric, and never wait for payday, again!

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As the season of spontaneous summer spending comes to a crashing halt, we thought it might be a good refresher (for all of us!) to get back to basics. A little “Budgeting 101” to help us reset and refocus on the “why” and “how” of budgeting, prioritizing, saving, spending—all of it! There may even be a little homework. Class is in session, so grab your budgets and follow along!

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Waiting for money isn’t fun.

Payday shouldn’t be the only day you feel financial peace.

And bills aren’t the boss of your dollars (you are!).

… and, if any of this sounds too familiar, chances are you’re stuck in the paycheck-to-paycheck cycle.

We all know the feeling—a shiny, new paycheck arrives. You sigh and pay the bill that’s been eating away at you … the one that’s nearly past due. Then you cover a few necessities and, before you know it, you’re out of money and stressed about the next bill that’s waiting in line. And back to worrying (and waiting) you go. There just never seems to be enough.

But what if I told you that it doesn’t have to be this way? Thousands of YNABers, from income brackets large and small, have escaped the paycheck-to-paycheck cycle. They don’t hold their breath for payday any longer because they’ve got money in the bank. And you can, too.

Meet the Age of Money

Let’s say that you start budgeting today. For reasons that you’ll understand in a few paragraphs, we’ll pretend that you put all of your current money into a bucket with the label “Bucket #1.”

Now, imagine that payday is tomorrow. You put that money into Bucket #2. Your partner gets paid this Friday, and boom! You’ve got Bucket #3. Next week, your grandma sends you a birthday card with a cash gift. Yup, that’s Bucket #4. Every time you get more money, you add a new bucket.

When it’s time to pay a bill or refill your gas tank, you dip into your buckets, in order, starting with Bucket #1. When Bucket #1 is empty, you move on to Bucket #2, and so on. Accountants refer to this as “first in, first out” or the FIFO method. At YNAB, this is known as Rule Four: Age Your Money, and it’s the secret to never waiting around for payday, again.

Say Goodbye to the Paycheck-to-Paycheck Cycle

Of course, I’m not talking about actual buckets. I’m illustrating a point, and here’s why these pretend buckets matter. The longer you wait to spend the money in Bucket #1, the older it grows. Obviously, you can’t leave money in Bucket #1 if you need it to pay a bill that’s due right now—you have to spend it.

But let’s say that all of your bills are paid, you’ve got groceries in the fridge, and you don’t have any pressing expenses. In this case, you can leave Bucket #1 alone for a bit. No problem. And, when you’re able to extend the amount of time between when you receive money and when you spend it, you flip the script …

Now, instead of bills waiting for your income, you’ve got income waiting for your bills! You pay September’s expenses with August’s paychecks. There’s no need to time your bills with your paydays because you’ve got the cash ready and waiting. Simply pay your bills when they arrive (or put them on autopay!). You’re in a position of power.

Get Ready to Age Your Money 30 Days

A good starting goal is to age your money at least 30 days—to live on last month’s income. But how can an ordinary person, with an ordinary salary, get so far ahead of their expenses that new paychecks simply lay, unused, on top of the pile? There are two ways:

Slow & Steady

Follow YNAB’s method, and you’ll naturally begin to age your money with the first three rules. By zeroing in on your true financial priorities and giving every dollar a job (that’s Rule One), you’ll consistently spend less than you earn. Your spending habits will change to support your big-picture financial goals and, over time, your money will grow older.

Of course, you can jump-start the process by analyzing your spending habits and identifying opportunities for savings. You might be surprised to discover that you don’t even miss your old habits. Give it a try.

Quick Bursts

If you’re feeling aggressive, why not make aging your money a game? Intense focus on getting ahead may not be sustainable over the long term but, for some, quick progress is more motivating. You can drastically cut corners (no eating out!), or look for ways to earn more (overtime!). Or do both.

Pair these two approaches—long-term habit change and quick bursts—and you’ll see results faster than ever.

Financial Peace, at Last

With today’s obligations covered, you’ll be free to look ahead and make more strategic financial decisions about the future. You’ll no longer be backed into a corner, and money worries will be a thing of the past. And, the more you age your money, the more financial stability and flexibility you’ll have!

Give YNAB a try, free, for 34 days, and find out what it feels like to take control. On average, new budgeters save $600 by month two and more than $6,000 the first year—a pretty solid return on investment.

Your Next Step

Remember, budgeting is not restrictive. You won’t be spending less, you’ll be spending right. You can do this! Today. Right now. What do you have to lose? Except all that debt and stress. (Ok, so kind of a lot.)